another tax question

Discussion in 'Business Operations' started by touhey33, Feb 17, 2006.

  1. touhey33

    touhey33 LawnSite Senior Member
    Messages: 778

    Do you put equipment purchased under the expense category? And do you include sales tax with that? I know you can include sales tax for every day expenses, but what about equipment? My mower was around 6400 and 6900 w/tax, I think I am supposed to use 6900 but not sure.
  2. mtdman

    mtdman LawnSite Gold Member
    Messages: 3,143

    Something that big you need to depreciate. Or use a 179 expense, as long as it doesn't take you into the red for the year. And yes, use the final number with tax.
  3. touhey33

    touhey33 LawnSite Senior Member
    Messages: 778

    What about smaller equipment like trimmers, blowers, etc...
  4. ECS

    ECS LawnSite Bronze Member
    Messages: 1,733

    This year I am separating the sales tax for my accountant for all of my expenses. I am also keeping track of all my non work related sales tax for my accountant.
  5. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Messages: 7,547

    You dont have to depreciate something that small. I beleive the amount you can take is around $20,000. And the sales tax is included in the expence unless its used for re-sale like mulch, or flowers.
  6. gqnine44

    gqnine44 LawnSite Senior Member
    Messages: 501

    I am pretty sure anything over $200 that is expected to last more than 2 years will have to be depreciated. So I do my blowers and trimmers along with mowers.
  7. mtdman

    mtdman LawnSite Gold Member
    Messages: 3,143

    My accountant told me anything over $300. As long as it doesn't make you show a loss for the year, you should 179 expense all that stuff. You get to take the expense all at once, no bothersome depreciation tables, etc. And I do believe you can hold over some of the 179 expense to the next year if it makes you show a loss.

    I 179 expense blowers, trimmers, mowers, etc if it breaks that $300 barrier. Capitol equipment. Certain items, called listed items, have to be depreciated.

    Your best bet is asking a cpa.
  8. Evergreenpros

    Evergreenpros LawnSite Bronze Member
    Messages: 1,154

    Section 179 of the United States tax code allows businesses to immediately deduct the cost of certain types of property on their income taxes. This property is generally limited to tangible personal property such as equipment and vehicles. Buildings are not eligible for section 179 deductions. Depreciable property that is not eligible for a section 179 deduction is still deductible over a number of years through MACRS depreciation.

    The section 179 deduction is intended for small businesses. The maximum section 179 deduction a company may take in a year is currently $102,000. Companies who place more than $512,000 worth of section 179 property into service in a year are not eligible to take the deduction.

    There are limitations on vehicles but for equipment there isn't. So up to 102k a year can be immediately deducted.
  9. mtdman

    mtdman LawnSite Gold Member
    Messages: 3,143

    As long as it doesn't make you show a net loss.

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